The Manic Month of May. Sell in May and go away? That would have worked in the petroleum markets so far. Of course if you looked at a chart of the markets you might be sick to see how much money you may have given back. The bulls started the lusty month of May lusting for new highs which they got on light holiday volume as the lead month oil contract broke out to a high of approximately 8715 on May, 3, 2010. Those lofty highs were only fleeting as Greece debt fears engulfed the global market place crushing the optimism of April into the fear factor of May as oil came crashing down to what was a flash crash low of approximately 6424 on that fateful May 20,2010.

This manic month of May has been gripped by fear and loathing as to the state of euro zone debt. The market feared that the PIIGS (Portugal, Ireland, Italy, Greece and Spain) would bring down the global economy. We even had a mini flash crash as protestors surrounded the Greek Parliament. Oil fortunes both good and bad have been dictated by sovereign debt fears but also because of a back drop of a massive over supply.

Yet oil has staged an impressive comeback. Rumors that the Chinese were going to reduce their holdings of European debt and euro currencies were denied and that seemed to ease the markets' concern. The denial sparked a massive across the board commodity and global stock rally. We also had end of the month short covering as many traders headed out early for the Memorial Day weekend.

While fear drove the market down in the month of May it is in part due to fear that is now driving us higher. The fear of the scary 2005, a fear that is giving oil and natural gas for that matter at least 14 more reasons to rally. Why 14? Well 14 to maybe 23 to be exact. That's the number of named storms that the National Oceanic and Atmospheric Administration are predicting. This prediction is the highest that the NOAA has ever predicted and this could potentially make this the most active hurricane season since the most devastating season on record which was 2005. You might remember the names of those devastating storms.

Names like Dennis and Emily, Rita, Wilma and the most devastating of them all, Katrina. The NOAA says that three to 7 of those named storms could be major category 3 or above hurricanes, with winds of more than 110 miles per hour. A sobering prediction that sent petroleum soaring.

Even natural gas prices rose on this hurricane forecast ignoring what was a bearish Energy Information Agency Storage report. The EIA reported that working gas in storage was 2,269 Bcf as of Friday, May 21, 2010, according to EIA estimates. This represents a net increase of 104 Bcf from the previous week and 4 Bcf higher than market expectations. That put gas stocks 71 Bcf higher than last year and a whopping and 318 Bcf above the 5-year average of 1,951 Bcf. It all didn't matter when the hurricane premium was priced in. The market did its job reflecting on the increased risk of hurricanes. These predictions cannot and should not be ignored by the market yet at the same time one wonders if we do not see some early activity on the storm front that was perhaps overdone. With all due respect to the NOAA and other hurricane forecasters, they have been known to be wrong on occasion and it is possible that the market is getting worked up over nothing. Once again the holiday mood in the market may have exaggerated this move.

The market also got a boost on news that Obama ordered a six month halt to all deepwater drilling. The President also suspended planned deep water exploration at two sites off the coast of Alaska and cancelled two other drilling lease auctions, one in the Gulf and the other off the coast of Virginia. The oil market took note and it played into the oil buying frenzy.

Overall the fundamental outlook for oil is still very bearish. Even if the euro zone recovers it is unlike that the euro as a currency will regain its former glory. Without a very strong euro, sharply higher energy prices will be less likely. The month of May had one major drop and after a recovery attempt and rally in early June, we expect another major drop. We also expect very wide trading ranges to continue giving very good opportunities for some big money trades and of course risky if you are on the wrong side.

On a sad note it was reported that the US has suffered its 1000 death in the war in Afghanistan. I bet that is a surprise to some Americans that tend to forget that we even have a war going on. The reason we can forget is because of all the brave men and women who have chosen to protect us and keep this land of freedom and liberty safe so our families can live, work, and play without fear. As we go out to enjoy this beautiful weekend there are families that are suffering the grief of a lost love one who have become heroes and gave all for the dream of freedom and liberty that has become America. Many whose pain is still fresh feel the sting of losing a father, mother, sister or brother. This follows generations of other patriots that have given all so that freedom stays alive. As we go out to celebrate some nice weather and enjoy our picnics, take some time to say a prayer or find a soldiers family to lend support to. God bless them and God bless America.